The Project in the Organizational Structure Chapter 5 The Project in the Organizational Structure © 2012 John Wiley & Sons Inc.

Project Growth Need for speed, market responsiveness, and product flexibility Need for broader areas of knowledge in developing new products and services Rapid expansion of technology Management inability to understand and control large numbers of activities

Organizational Issues Related to Projects How to tie project to parent firm How to organize the project How to organize activities common to multiple projects

Traditional Forms of Organization Functional Projectized Matrix Composite

Projects in a Functional Organization Make it a part of one of the functional divisions More than one choice may exist If support from other areas is needed, they are expected to help support the project Another way is to assign the work to all divisions with the top management overseeing the effort

Including Project In Traditional Forms Figure 5-1

Advantages Maximum flexibility in the use of staff Experts can be utilized by many different projects Specialists can be grouped to share knowledge and experience Functional division serves as a base of technological continuity Functional division contains the normal path of advancement

Disadvantages Client is not the focus of the activity Functional units tend to be oriented toward the activities of that particular function No individual is given full responsibility Response to client needs is slow and arduous Tendency to suboptimize the project Motivation tends to be weak A holistic approach to the project is not facilitated

Projects in a Projectized Organization Figure 5-2

Advantages Project manager has full authority All members report to the project manager Short lines of communication When there are similar projects, expertise can be retained Strong and separate identity Swift decisions Unity of command Structurally simple and flexible Supports a holistic approach

Disadvantages Duplication in staffing Stockpiling Workers tend to fall behind in other areas of their technical expertise Inconsistency in policies and procedures A project takes on a life of its own Worry about life after the project is over

Projects in a Matrixed Organization Matrixed project organization Keeps desirable features of both standalone and functional projects Avoids some of the disadvantages of each type It is a combination of standalone projectized and functional organization structures Can take on a variety of specific forms

Strong Matrix Figure 5-3

Weak Matrix Project might have only one full-time person, the project manager Functional departments devote capacity to the project Primary task of the project manager is to coordinate project activities carried out by the functional departments

Advantages The project is the point of emphasis The project has access to the entire organization for labor and technology Less anxiety about what happens when the project is completed Response to client needs is rapid Access to administrative units of firm Better balance of resources Great deal of organizational flexibility

Disadvantages Power balance is delicate Projects compete for resources Projectitis is still a serious disease Division of authority and responsibility is complex Matrix management violates the management principle of unity of command

Virtual Projects Project team crosses time, space, organizational, or cultural boundaries Facilitated by the use of the Internet Often organized as a matrix

Virtual Project Rules Challenging and interesting projects Use volunteers Include few people who know each other Create an online resource to learn about each another Encourage frequent communication Divide work into independent modules

Projects in Composite Organizational Systems Figure 5-4

Selecting a Project Form Firms typically do not set out to pick an organizational form Rather, the structure evolves over time The structure is not static Rather, it changes as the organization, its goals, and its environment changes

Functional Form Best for… In-depth application of a technology Large capital investment, especially when that investment is concentrated in one functional area

Project Form Best for… Handling a large number of similar projects Handling a one-time project that requires much control, but is not focused on one functional area

Matrix Form Best for… Projects that require inputs from several functional areas Projects that use technology from several functional areas

The Project Team Systems architect Development engineer Test engineer Contract administrator Project controller Support services manager

Human Factors and the Project Team All projects are composed of inter-connected groups These groups can form teams It is not enough to have an effective team The team must also be working towards the good of the project Need to avoid “us versus them” mentality

Human Factors Continued Some of the problems that prevent a team from performing effectively: Internal conflict Member frustration Wasting time Poor decision making Team members are more concerned with finishing the job than doing a good job Project teams need to work together